Rate Of Tax Under Default Tax Regime (New Regime) U/S 202
by Under the Income tax Act, 2025, Section 202 provides the Default Tax Regime, commonly known as the New Tax Regime, for specified taxpayers. It applies to an individual, Hindu Undivided Family, Association of Persons other than a co operative society, Body of Individuals and specified Artificial Juridical Persons, unless the taxpayer exercises the prescribed option to choose the regular tax regime. The new regime provides lower and wider tax slabs compared with the old regime. The rates under Section 202 apply from Tax Year 2026 27. The taxpayer generally gets fewer deductions and exemptions under this regime, subject to the deductions specifically permitted by law.
Tax Rates under Section 202
| Sl. No. | Total Income for Tax Year 2026 27 | Rate of Tax |
|---|---|---|
| 1 | Up to ₹4,00,000 | Nil |
| 2 | ₹4,00,001 to ₹8,00,000 | 5% |
| 3 | ₹8,00,001 to ₹12,00,000 | 10% |
| 4 | ₹12,00,001 to ₹16,00,000 | 15% |
| 5 | ₹16,00,001 to ₹20,00,000 | 20% |
| 6 | ₹20,00,001 to ₹24,00,000 | 25% |
| 7 | Above ₹24,00,000 | 30% |
These rates are the default rates under Section 202. A taxpayer can exercise the prescribed option to move out of the default regime and choose the regular tax regime.
Example: If an individual has total income of ₹18,00,000, tax is calculated progressively using the applicable slabs of 0%, 5%, 10%, 15% and 20%. Surcharge, where applicable, and Health and Education Cess at 4% are added separately.